TORONTO (Reuters) - Canada’s benchmark stock index rose for the seventh straight day on Wednesday to a record high close, led by gains for its financial services group after strong economic data from both Canada and the United States.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 58.92 points, or 0.37 percent, at 15,844.95, a record close.
“People are trying to run with the herd and I guess the big danger is that when you run with the herd you might get trampled at some point,” said Michael Sprung, president at Sprung Investment Management.
The index has rallied more than 37 percent since hitting a three-year trough in January last year.
“One’s got to be very conscious of valuation and what they’re paying for securities,” Sprung said.
Data showed Canada’s manufacturing sales jumped in December for the second month in a row, and that U.S. inflation and retail sales climbed in January, helping to push bond yields higher.
Higher bond yields, which reduce the value of insurance companies’ liabilities and increase banks’ net interest margins, have helped underpin financials since the U.S. presidential election on Nov. 8, with the sector up more than 14 percent in that time.
Royal Bank of Canada (RY.TO) rose 1.1 percent to C$98.53, while the overall financials group climbed 0.8 percent.
“We are just coming into a bank reporting season. We may see dividend increases but nevertheless I think people have been pretty complacent about the banks,” said Sprung.
Energy shares gained 0.7 percent as oil mostly held its ground after U.S. stockpiles soared to a record high.
U.S. crude CLc1 prices settled 9 cents lower at $53.11 a barrel.
Nine of the index’s 10 main groups rose.
The telecoms group climbed 1.8 percent, led by a 5.1 percent gain for Manitoba Telecom Services Inc MBT.TO to C$39.52 after Canada’s business competition watchdog asked BCE Inc (BCE.TO) to divest some assets to gain approval of its deal to buy the company.
Industrials added 0.9 percent, with CAE Inc (CAE.TO) climbing 6.6 percent to C$20.24 after Desjardins raised its target price and rating on the stock.
Teck Resources Ltd (TECKb.TO) reported a better-than-expected quarterly profit, but weaker demand at the start of the year spooked investors.
Its shares plunged more than 10 percent to C$29.32, while the materials group, which includes precious and base metals miners and fertilizer companies, lost 1.2 percent even as copper and gold prices rose.
Reporting by Fergal Smith; Editing by Tom Brown and David Gregorio